EU competition regulators probing Facebook's planned cryptocurrency

Updated / Wednesday, 21 Aug 2019 18:15

By sending out a questionnaire, the EU could be preparing the ground for a formal investigation

EU antitrust regulators want to know whether Facebook's proposed Libra cryptocurrency and its use of consumer data pose possible anti-competitive constraints, people familiar with the matter have said.

The European Commission sent out a questionnaire earlier this month to various parties involved in Libra, giving respondents two to three weeks to provide feedback, the people said.

By sending out a questionnaire, the EU could be preparing the ground for a formal investigation.

The EU competition enforcer's main focus is on the use of consumer data, the people said.

Facebook has linked up with 28 partners in a Geneva-based entity called the Libra Association, which will govern its new digital coin, which is due to launch in the first half of 2020.

"The Commission is in particular concerned about the possible competition restrictions that may result from the Association, especially with regard to information that will be exchanged and the use of consumer data," the questionnaire said.

The Commission, which can fine companies up to 10% of their global turnover for breaching EU antitrust rules and order them to change their business practices, declined to comment. Facebook was not immediately available for comment.

The EU's queries about Libra follow recent calls from politicians, central bankers and regulatory watchdogs for tight regulation of Libra to avoid disrupting the global financial system amid concerns that it may be used to launder money and could also affect the privacy of users.

The EU document also sought information on the scheme's governance structure and to what extent it is open to others.

Bloomberg was the first to report about the Commission's questionnaire.

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